Never mind the media frenzy about tracking the private jets of Russian oligarchs. When do sanctions on Russia following its invasion of Ukraine impact chartering private jets? The European Union, the United Kingdom and the United States have each taken different approaches. To add to the confusion, the US Federal Aviation Administration already changed its original order.
Last week the UK said it was upping the ante on offenders. In a letter to the industry, Secretary of Transportation Grant Hobbs wrote, “non-compliance may give rise to a criminal offense.” That came after a private jet linked to a friend of Roman Abramovich was detained at an airport near London.
The Air Charter Association, a European business aviation trade group, warned members, “[W]here a company or other body corporate has committed one of these offenses, individual company directors and other senior officers (and) managers can also be convicted of the same criminal offense.”
The previous week, Canadian authorities took a lighter approach, levying around $20,000 in fines between the pilot, owner and passengers of a private jet tied to Russia.
If you are not an oligarch, there are still several ways the Russian sanctions can impact you regarding private jet charter. One is if you own a jet and your management company allows it to be chartered to a sanctioned party, next would be if you hired a prohibited private jet, third would be if you helped a prohibited individual charter, and lastly, understanding if you, a family member, or your company is prohibited.
The US FAA extended the private jet charter ban to Russian citizens in its original notice. According to TASS, as of 2015, around one million Russian nationals held second citizenship, mainly with the US, UK, and Israel. Last week it narrowed the ban. The updated NOTAM limits the prohibition to “a Russian person or entity identified by the International Trade Administration’s Consolidated Screening List.”
The UK language states the ban extends to “persons connected with Russia.” That’s defined as an individual who is, or an association or combination of individuals who are, ordinarily resident in Russia; an individual who is, or an association or combination of individuals who are, located in Russia; a person, other than an individual, which is incorporated or constituted under the law of Russia, or a person, other than an individual, which is domiciled in Russia.
However, The Air Charter Association points out the sanctions don’t apply to Crown Dependencies and Overseas Territories. They set their own rules.
The EU sanctions still apply to Russian passport holders, even if they are dual citizens. The European Business Aviation Association says operators need to actively question potential customers to ensure compliance even if “it may feel unnatural…these are exceptional circumstances, so normal practices do not suffice. If asked to provide an aircraft, EBAA operators need to question every customer Operators are also recommended to go beyond just asking the passenger to state or sign something and see, for example, what languages the customers use…to determine what the actual truth.”
From an aircraft owner’s perspective, the key is to ensure your management company has protocols to ensure your aircraft isn’t chartered to a banned individual. You don’t want your jet impounded, after all. You also want to make sure you don’t charter a sanctioned aircraft. WingX estimates around 300 of the over 400 private jets beneficially owned by Russians are registered outside Russia. Those aircraft are all subject to the bans by the US, UK, and EU If you charter one of those airplanes, you could find your payment frozen. The jet detained in Canada was registered in the Cayman Islands. The aircraft seized in the UK was registered in Luxembourg. If you have a Russian passport, whether you can charter a private jet will differ. While Russian nationals who are not sanctioned can still travel as passengers in many cases, non-connected individuals cannot charter a private jet to assist a person or company that is banned from sanctions.
EBAA notes, “Enforcement in the form of measures such as fines, impounding property, removing licenses is a matter for national jurisdiction, but…the penalties must be effective and dissuasive.” It also says further clarifications are expected in the coming days, and as witnessed by the FAA, details are subject to change.